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V. GMAC's Basis in Rate-Supported RISC's15
GMAC's reported tax basis in a rate-supported RISC was equal
to the net amount of the RISC reported on GMAC's balance sheet.
VI. Fleet Rate Support Programs
A. General Background
During 1985, GM regularly negotiated incentive arrangements
for the sale of multiple GM vehicles to fleet customers (fleet
vehicles). The terms of a fleet transaction were set between GM
and the fleet customer. GM sold fleet vehicles to an independent
GM dealer16 who in turn sold the fleet vehicles to the fleet
customer. Depending on the circumstances, delivery of the fleet
vehicles might be coordinated through the independent GM dealer
or, alternatively, might be delivered by GM directly to the fleet
purchaser. The independent GM dealer, however, was responsible
for payment for the fleet vehicles.
In a fleet transaction, because the independent GM dealer
actually completed the sale of the fleet vehicles to the fleet
customer, the independent GM dealer earned a profit on the fleet
transactions. This profit margin, however, generally was lower
than the independent GM dealer's average profit margin on sales
to retail customers. The amount of the independent GM dealer's
15 For an example, see infra p. 35.
16 An independent GM dealer was needed as the seller of
record.
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